Marijuana is getting cheaper. For Colorado and some states, that’s a problem
States may have failed to anticipate this problem because of misleading predictions about the effects of legalization
The Denver Post (US)
Wednesday, November 21, 2018
Wednesday, November 21, 2018
Wholesale marijuana prices in Colorado have fallen by a third in just the past 12 months, continuing a price crash that began soon after the drug was legalized. Although this implies that some marijuana entrepreneurs are going to go bankrupt, the bigger financial hit will be felt by states that tax marijuana based on its price. Marijuana prices are collapsing because a legal business is dramatically cheaper to operate than an illegal one. Ironically, in a bid for more tax revenue per marijuana sale, Colorado increased its marijuana tax rate from 10 percent to 15 percent last year, only to see the anticipated added tax revenue wiped out by falling prices in a year’s time.
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